Wall Street’s Focus is Too Short-Term, Says Clinton

Hillary Clinton says that as president, she would try to rid Wall Street of its tendency to fixate on short-term goals like earnings reports.

“Too many pressures in our economy push us toward short termism,” she said, in a speech at New York’s New School today. “Everything’s focused on the next earnings report or the short term share price, and the result is too little attention on the sources of long-term growth: research and development, physical capital, and talent.”

It’s a question that inevitably gets brought up every time one of Silicon Valley’s darlings goes public: how will the pressure of reporting quarterly earnings change the company’s long-term strategy? We covered it in the pages of WIRED back when Facebook IPOed. More recently, former Twitter CEO Dick Costolo said that living up to Wall Street’s short-term expectations was a key challenge for Twitter.

Twitter's Dick Costolo is out now, but he's got one thing right – going public creates a short-term frame of mind: http://t.co/DckWxhJGPl

At the crux of Clinton’s interest in ending this trend, though, is her belief that this short-term thinking motivates employers to keep wages low in order to inflate their share prices. “I would argue that’s bad for business in the long run,” Clinton said, “and it’s really bad for our country.”